Russia on Monday cautioned that it would retaliate against any European country that tries to seize its assets, after reports that the European Union is considering using hundreds of billions of dollars in frozen Russian funds to support Ukraine.

Moscow said that any attempt to take its holdings would amount to theft by the West and would weaken trust in US and European bonds and currencies.

According to reports, the European Commission is weighing a proposal to use Russian cash deposits at the European Central Bank from maturing bonds to fund a “Reparations Loan” for Ukraine.

"If this happens, Russia will pursue the EU states, as well as European degenerates from Brussels and individual EU countries who try to seize our property, until the end of the century," former Russian president Dmitry Medvedev said through Telegram.

Medvedev, who is now the deputy chairman of Russia’s Security Council, added that Moscow would go after European states “in all possible ways” and “in all possible international and national courts” as well as “out of court.”

Earlier this month, Medvedev warned that Russia would seize more Ukrainian territory and target British assets worldwide after London revealed it had used about 1.3 billion dollars from frozen Russian funds to supply weapons to Ukraine, Reuters reported.

The European Commission is now exploring ways to finance Ukraine’s defence with frozen Russian assets. The plan would involve using cash balances linked to those assets and replacing them with EU-backed IOUs. Commission president Ursula von der Leyen said last week that the EU must find new methods to fund Ukraine through these frozen holdings.

One official described the proposal as “legally creative” and noted that it could provide Ukraine with significant new funding while avoiding the legal risks of directly expropriating Russian assets, Politico reported.

So far, the EU has only used interest from frozen Russian assets to help cover its share of a € 45 billion G7 loan to Ukraine, which is nearly fully disbursed. With Kyiv running low on resources, the Commission now wants to tap Russian deposits at the European Central Bank to back a “Reparations Loan” for Ukraine’s longer-term support.

“Ukraine will only pay back the loan once Russia pays for the reparations. The money will help Ukraine already today,” Von der Leyen told the European Parliament.

Around 200 billion euros in Russian assets were frozen after Moscow’s full-scale invasion of Ukraine in February 2022, most of them held by the Brussels-based financial institution Euroclear. Ukraine is now facing an estimated € 8 billion budget gap next year.

The new plan has drawn cautious interest among EU members, but no firm commitments yet. Both Belgium and Euroclear have also warned that directly using frozen assets to issue loans could lead to serious legal complications.